ISSB issues sustainability disclosure standards IFRS S1 and S2

On 26 June 2023, the International Sustainability Standards Board (ISSB) published two sets of disclosure requirements, IFRS S1 and IFRS S2, to help companies communicate with investors about sustainability-related risks and opportunities in the short, medium, and long term.

The standards provide a framework for companies to report sustainability information in their financial statements and provide further direction regarding the process of preparing and reporting on sustainability and climate-related financial information, including some examples of the application of the Standards.

IFRS S1 sets out general sustainability-related disclosure requirements, while IFRS S2 specifies climate-related disclosure requirements.

When do the standards become applicable?

These Standards apply to all entities applying IFRS for annual reporting periods commencing after 1 January 2024.

Why do we need these standards?
The ISSB developed these standards after receiving feedback from the market and in response to calls from various international organizations and leaders in the business and investor community. The aim is to establish a global baseline of sustainability-related disclosures, ensuring companies provide this information alongside financial statements in the same reporting package. The ISSB Standards are meant to be used with any accounting requirements and are built on the concepts of the widely used IFRS Accounting Standards.

The role of ISSB in supporting implementation
The ISSB will work with jurisdictions and companies to support their adoption. They will create a Transition Implementation Group to assist companies in applying the Standards and launch capacity-building initiatives for effective implementation. The ISSB will also collaborate with jurisdictions that wish to require additional disclosures beyond the global baseline and cooperate with the Global Reporting Initiative (GRI) to support efficient reporting when the ISSB Standards are used alongside other reporting standards.

The leaders and representatives of various organizations and businesses have shown support and appreciation for the ISSB’s efforts in establishing these standards, emphasizing the importance of globally comparable sustainability-related disclosures for investors and companies alike.

Find out more

You can read more about the standards on the IFRS website here.

Register on the IFRS website to download a copy of the standards.

• IFRS Sustainability Disclosure Standard S1 – General Requirements for Disclosure of Sustainability-Related Financial Information – access the standard here.
• IFRS Sustainability Disclosure Standard S2 – Climate-Related Disclosures – access the standard here.

CIBA will issue further guidance in due course.